Africa Reinsurance Corporation (Africa Re) has restated its corporate commitment to the Nigerian market despite the challenges of the operating environment.
An official statement by Africa Re states:
Nigeria, where Africa Re is headquartered since 1976, represents an important market for the Corporation as it represents about 13% of its total turnover in 2016. In Nigeria, the biggest market in the West African region, Africa Re enjoys about 20% of the reinsurance market share.
Other Nigerian local reinsurers write about 15% market share, while foreign reinsurers have on the average about 65% market share. The predominance of foreign reinsurers, mostly European, in the Nigerian reinsurance market has to do with the total low underwriting capacity (and shareholders’ funds) compared to the size of total risk exposures.
Standing with Nigerian insurers, the Corporation has developed diverse partnerships to support the market development, for example in the mitigation of the forex risk. Unlike the foreign reinsurers, Africa Re accepts payment of reinsurance premiums in Nigerian bank accounts and in the national currency (Naira).
To support Nigerian economy, Africa Re has also invested over US$ 90 million in various Nigerian companies and indirectly created over 570 jobs.
Besides its involvement in the development of the insurance industry through in-house and market insurance trainings, Africa Re is also working with the National Insurance Commission of Nigeria to enhance public awareness of insurance products in order to boost insurance penetration in the country.
Through its Corporate Social Responsibility (CSR) Trust Fund, Africa Re’s shareholders have sponsored in the last three years up to US$ 1,252,000 in various CSR initiatives.
Over the years, Africa Re has been involved in capacity building in the African insurance industry with the view of developing the market. In 2015, it invested US$ 380,000 to train over 1300 insurance professionals in over 100 companies. The Corporation has also instituted performance awards aimed at enhancing corporate governance, innovation and operational best standards for the insurance industry from which many African insurance professionals have benefited tremendously.
Admittedly, the Corporation’s enviable financial and operational success has enabled it to take on certain obligations to the benefit of its various stakeholders including the insurance industry, shareholders, member States and even the communities in which it operates. These obligations have been discharged most credibly and faithfully in line with the ideals of the Corporation’s developmental mission.
The main purpose for the establishment of the Corporation in 1976, was to prevent capital flight from the African continent, a practice which was massively prevalent in the 1960s & 1970s and which still persists nowadays, though in a reduced way. In addition, Africa Re’s mission includes the development of the insurance and reinsurance industry in Africa, promoting the growth of underwriting and retention capacities across the continent, and supporting African economic development. The pursuit of this mission has been the sole focus of the Board of Directors, Management and staff of the Corporation over the years.
From the onset, Africa Re’s mission in Africa is unique in that it sets itself apart from the rest of the industry and clearly defines its responsibilities vis-à-vis the development of the African continent. The corporate mission also informs its legal status and shareholding size and structure which includes the founding 41 African states. As a result, the Corporation enjoys a large acceptance across the continent and this has allowed it to concentrate up to 28% of the total African shareholders’ funds in 2015, an indication of its weight in the total African underwriting capacity. Without that capacity, given the relatively undercapitalization of African reinsurers (average solvency of 85% in 2015), more reinsurance premiums will leave the continent to overseas reinsurers.
Africa Re believed in the continent before anyone else and it demonstrated that by opening offices and subsidiaries, today at the number of 8, long before the ‘Africa Rising’ narrative started recently. After more than four decades of determination and focus, Africa Re is now the leading African reinsurer on the continent.
Of the Corporation’s gross turnover which exceeded US$ 642 million in 2016, only 9.5% of this income is from mandatory cessions (in 41 member countries) of 5% on treaty business, the bulk coming from North Africa. This attests to the fact that the Corporation’s income is obtained on a voluntary, competitive and value-for-money basis.
The choice of Africa Re as a preferential partner in the continent is guided by the Corporation’s performance attested by its financial strength rating, excellent technical performance, proximity to clients, competitive pricing and technical assistance. Simply put, the Corporation has been a commercial success celebrated by African and international analysts.
